Financials Acquisition Corp Proposed Transaction Update (3711D)
21 June 2023 - 4:00PM
UK Regulatory
TIDMFINS TIDMFNWR
RNS Number : 3711D
Financials Acquisition Corp
21 June 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
21 June 2023
Financials Acquisition Corp
(the "Company")
Proposed Transaction Update and Proposed Extension of Business
Combination Deadline
Today, Financials Acquisition Corp (the "Company"), a special
purpose acquisition company, announces that it will be seeking
shareholder approval to amend its Articles of Association to extend
the deadline by which it may complete a Business Combination (as
such term is defined below) to 31 December 2023, amongst other
matters (the "Extension"). Notice of Extraordinary General Meeting
is expected to be circulated by the Company in due course. It is
currently expected that the Extraordinary General Meeting will be
held on 10 July 2023.
The Company was formed for the purpose of entering into a
business combination with a technology enabled company or business
operating principally in (or adjacent to) the insurance or broader
financial services industry ("Business Combination"). The Company
has, since the date of its initial public offering in April 2022,
engaged with a select number of opportunities about a potential
Business Combination in the insurance or broader financial services
industries.
The Company has recently identified a Business Combination
opportunity that it proposes to pursue, which could involve the
Company raising additional capital and becoming a listed operating
company deploying funds into the Lloyds of London insurance market
for reinsurance purposes (the "Proposed Transaction"). Proposals in
relation to the Proposed Transaction are at an early stage and,
while there is no certainty that any such transaction can be
completed, the Company remains confident that with the benefit of
this extension it would be able to complete this or another
Business Combination.
During the Company's search process it became clear that the
global specialty insurance market and specifically risk
underwritten in the Lloyd's market offered some of most attractive
risk adjusted returns globally. The Company notes that since 2017
rates have been hardening in this market rising on average by over
70% adjusted for inflation. The Company notes that this hardening
market has been driven by core claims inflation, large losses from
Covid-19, natural catastrophes, Ukrainian war and capital markets
uncertainty. The Company notes that the market as a whole has also
been benefitting from improved efficiency driven by both technology
and the work of the Lloyd's management team.
The Company further notes that o ver the last year Lloyd's has
created a new structure, London Bridge 2 PCC Ltd, which allows
easier access for institutional capital into the market. This,
combined with the Company's management team, board of director and
advisor relationships within the market leads the Company to
believe that it can create an efficient vehicle for investors to
access attractive returns without paying significant goodwill or
adding further fee structures. Upon completion of the Proposed
Transaction, the Company's core strategy will be to focus on the
Lloyd's market, and understands that it will be one of the only
Main Market listed companies in London with such a core focus.
It is the Company's intention that the portfolio of insurance
risk will be curated to provide optimum diversification and hence
capital leverage. The Company's management team has relationships
with some of the best underwriters in the market and has selected a
group of core and seed syndicates to work with. Combined with
treaty reinsurance programs written with select participants in the
market the Company expects to have access to up to GBP1bn of
capacity into the 2024 underwriting year of account and the Company
notes that this portfolio is forecast to have a lower level of
natural catastrophe exposure (particularly in the US).
The Company notes that the market as a whole produced 91.9%
combined ratio in 2022 despite significant large losses. The
Company further notes that since then, rates have risen another 9%
on average, which suggests that there will be an improvement on
last year's results. With a capital requirement forecast below 50%
and with the current level of risk-free rate investment returns
over the next five years the Company will be targeting an average
return on equity of more than 20%. Upon completion of the Proposed
Transaction the ratio of price to net asset value of the
transaction is expected to be under 1.1x net of expenses.
Given the opportunity that it has identified, the Company is
seeking plans to raise substantial funds beyond its existing
amounts held in escrow to support the Proposed Transaction.
Existing shareholders (other than the Sponsor Entities) will have
the opportunity to redeem their Ordinary Shares in the event that
the shareholder resolution relating to the Extension is approved
and they will also have a further opportunity to redeem their
Ordinary Shares upon completion of the Proposed Transaction. It is
the Board's current intention that non-redeeming shareholders will
be entitled to receive their pro-rata (post redemptions) share of a
200,000 bonus pool of new Ordinary Shares on completion of the
Proposed Transaction. The Company's existing Cornerstone Investors
(as such term is defined in the Company's prospectus dated 7 April
2022) have indicated that they would be supportive of the Proposed
Transaction.
Enquiries:
FGS Global - Financial PR Adviser
Conor McClafferty
Charlie Chichester
+44 20 7251 3801
FINSAC-LON@fgsglobal.com
The Company's LEI is 254900SWRQCI5ZUQEF15.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCPPUCPQUPWPWU
(END) Dow Jones Newswires
June 21, 2023 02:00 ET (06:00 GMT)
Financials Acquisition (LSE:FINS)
Historical Stock Chart
From Apr 2024 to May 2024
Financials Acquisition (LSE:FINS)
Historical Stock Chart
From May 2023 to May 2024